Working Paper, Brown University, Department of Economics 2005-12
In this paper we use global analysis to study the welfare properties of general equilibrium economies with incomplete markets (GEI). Our main result is to show that constrained Pareto optimal equilibria are contained in a linear submanifold of the equilibrium set. This result is explicitly derived for economies with real assets, of which real num´eraire assets are a special case.
General equilibrium incomplete markets optimality global analysis